We examined the effects of wild-type and mutant atlastin-1 on vesicle transport in the endoplasmic reticulum (ER)-Golgi interface and vesicle budding from ER-derived microsomes using the temperature-sensitive reporter vesicular stomatitis virus glycoprotein (VSV-G), and the ability of purified atlastin-1 to form tubules or vesicles from protein-free phosphatidylserine liposomes. A GTPase domain mutation (T162P) altered the cellular distribution of the ER, but none of the mutations studied significantly affected transport from the ER to the Golgi apparatus. The mutations also had no significant effect on the incorporation of VSV-G into vesicles formed from ER microsomes. Atlastin-1, however, was also incorporated into microsome-derived vesicles, suggesting that it might be implicated in vesicle formation. Purified atlastin-1 transformed phosphatidylserine liposomes into branched tubules and polygonal networks of tubules and vesicles, an action inhibited by GDP and the synthetic dynamin inhibitor dynasore. The GTPase mutations T162P and R217C decreased but did not totally prevent this action; the C-terminal transmembrane domain mutation R495W was as active as the wild-type enzyme. Similar effects were observed in human embryonic kidney cells over-expressing mutant atlastin-1. We concluded that atlastin-1, like dynamin, might be implicated in membrane tubulation and vesiculation and participated in the formation as well as the function of the ER.